Crown Paints will continue to manufacture and sell Regal paints while selling and distributing Sadolin paint.
PIC: The AkzoNobel team speaking at the re-launch
BUSINESS | SADOLIN
AkzoNobel, the Dutch based Sadolin brand owner has announced a new agreement with Crown Paints East Africa to oversee its sales and distribution network.
The company has downplayed queries into the deal by the Common Market for Eastern and Southern Africa (COMESA) Competition Commission.
Hitherto, AkzoNobel had a license agreement with Sadolin East Africa, before cancelling the deal when the company was taken over by Japanese rivals Kansai Plascon who now trade as “Plascon Uganda”.
Crown Paints East Africa trades in Uganda as Regal paints. Under the new deal, Regal Paints will continue to manufacture and sell regal paints and also sale and distribute Sadolin concurrently.
Officials from the COMESA competition commission (CCC) have written to AkzoNobel to receive retrospective approval of the agreement with Crown paints; however Johann Smidt, the Director for AkzoNobel Decorative Paints in Sub-Saharan Africa noted at the relaunch of Sadolin Uganda at the Sheraton hotel that the agreement falls outside the CCC’s purview.
“We received communication from COMESA on the 19th and 25th of September which was too late. I believe that there has been some miscommunication; whatever we have done to date has been within the laws of this country and this region,” Smidt said.
“We have already responded to COMESA; we believe that we are going to improve competition because we have a new player who is introducing a new product and an existing player, who is Sadolin and we will continue to be here,” he added, noting that the company is due to hold a telephone discussion with the CCC on 3rd October.
Rakesh Rao, the Chief Executive Officer of Crown Paints East Africa noted that the letter from the CCC had referred to their agreement with AkzoNobel as a merger when in fact there is none.
“We do not have a merger going on; we are a fully independent plant, so COMESA does not come into the picture at all,” he said.
Smidt noted that the war of words between Sadolin and Plascon had eaten into their market share and that this had influenced their quick agreement with Crown paints. He noted that the company is set to invest sh10b in a new plant which is expected to be operational by October 2017.
Michael Werikhe Kafabusa, the state trade minister and guest of honour, applauded AkzoNobel for investing in a new plant and urged the company to hire Ugandans.